All Forum Posts by: Samir Ariwala

Hi Pros,

I am planning to invest in RE Syndication through SD IRA and want to understand tax hit on return. I will be investing as limited partner in Syndication which will then hold multi-family or commercial real estate. Most projects last few years, 70% or so financed and it will give me yearly income as well as lump sum capital gain when project closes.

Questions are

1) Am I paying both UBIT and UDFI on income or UDFI is just form of UBIT and there will be just one tax. So as ex. I have $10k yearly income, which will make $7k (10K*70%) UDFI income, minus $1k standard deduction = $6k income. And I will pay 15% on first $2300, 25% on $5450-$2300 and 28% on remaining = $345+$787.5+$154. Am I correct?

2) I was told that capital gain on lump sum money at the end is not UBIT/UDFI eligible income, rather it is capital gain and there is no capital gain tax in IRA. Is that correct or I still owe capital gain under UBIT/UDFI. Assuming $50k capital gain and trust tax rate of 15% = $7500.

3) These tax are not affecting my personal income tax bracket and filed separately, correct?

Thanks,

Samir

@Lupe Arredondothanks for the reply. The issue with hard money lenders is that rate is relatively high and it will negatively affect cash flow. 

@Percy N.Thanks. The idea behind the group is that you can divide the workload. I can individually get a loan on my name and transfer to LLC but I am not sure what is the best way to do this when you have multiple partner on LLC. Should we all buy property one by one on own name and then transfer to LLC?

Any other structure that anyone have tried?

Thanks again!

Hi,

I would like to know what is the best way for group of friends to start purchasing rental properties. We would like to create LLC and get loan under that LLC name but I am finding it hard to get loan that way. Any suggestion/direction? We are interested in getting 30 year fixed loan for single family homes.

Or is there any other way for us to own this portfolio together?

Thanks,